Your business bought laptops or smartphones six months ago. They're sitting on your balance sheet as a depreciating asset — and a chunk of your working capital is locked inside them. Meanwhile, there's a marketing campaign you want to run, a new hire you want to make, or a piece of equipment you need to buy. The cash to do it is already in your business. It's just the wrong shape.
Sale and rentback is the mechanism that fixes this. In this article we explain exactly how it works, what the financial impact looks like for a typical Mauritian business, and how to decide whether it's the right move.
You sell your IT equipment to Kadadak at fair market value. We pay you. You then rent the same equipment back from us on a monthly plan. Nothing changes operationally — your team keeps using the exact same devices. What changes is your cash position and your balance sheet.
How the process works
You share your equipment details
Tell us what devices you have — make, model, purchase date and condition. A spreadsheet or simple list is enough. We can usually turn around an assessment within 48 hours.
We assess fair market value
We calculate the current market value of your equipment, taking into account age, depreciation and condition. Our assessment is transparent — we show you exactly how we arrived at the number.
We make you an offer
We present a buyback price and a proposed monthly rental rate for the same equipment going forward. No pressure — you review the offer and decide if it works for your business.
We pay you — your team carries on
Once agreed, we settle the payment and the rental contract begins. Your employees see no change — same devices, same setup. Your accounts team sees a cash injection and a new monthly operating expense.
The financial impact — a worked example
Let's say your business bought 20 laptops 8 months ago at Rs 35,000 each — a total capital outlay of Rs 700,000. Here's what a sale and rentback transaction could look like:
Your business releases Rs 476,000 in cash, maintains exactly the same equipment for your team, gains a fully deductible monthly operating expense, and adds a 48-hour replacement guarantee to every device. The only thing you give up is ownership of assets that were depreciating anyway.
Four reasons Mauritian businesses do this
Cash flow pressure
A major equipment purchase creates a cash flow squeeze. Rentback reverses this — putting the capital back in the business without disrupting operations.
Balance sheet improvement
Replacing a depreciating asset with an operating expense cleans up your balance sheet and may improve key financial ratios — relevant if you're seeking financing or investment.
Freeing capital for growth
The cash from a rentback can fund a new hire, a marketing push, stock purchase or facility investment — things that generate revenue rather than sit depreciating.
Gaining support and coverage
Owned equipment has no replacement guarantee. From day one of the rental, every device is covered by Kadadak's 48-hour replacement commitment.
Who is this right for?
Sale and rentback makes the most sense for businesses that:
- Made a significant IT purchase in the last 6–24 months and still have working capital tied up in it
- Are experiencing cash flow pressure and need liquidity without taking on debt
- Are preparing financial statements for a funding round, bank loan or investor review
- Want to convert a capital expenditure into a predictable, tax-deductible operating expense
- Have recently grown quickly and want to standardise their equipment under a managed rental programme
It's less relevant for very old equipment (where market value may be minimal) or for equipment with highly specialist configurations that a rental provider cannot easily re-deploy.
Is it the same as a loan?
No — and this is an important distinction. A sale and rentback is not a borrowing arrangement. You are genuinely selling an asset. There is no debt on your balance sheet, no interest rate, no repayment schedule and no lender. You receive cash and then pay a rental fee for continued use of the equipment. Your accountant will treat the monthly rental as an operating expense, not a loan repayment — which means it's fully deductible and does not affect your debt-to-equity ratio.
Under IFRS 16, sale and rentback transactions may result in the recognition of a right-of-use asset and rental liability, depending on the rental terms. For operating rentals (typically shorter-term or low-value), the treatment remains as an operating expense. We recommend discussing the specific accounting treatment with your auditor before proceeding.
The conversation to have today
The best way to find out if a rentback makes sense for your business is to have a 15-minute conversation with us. Share a list of your equipment, and we'll tell you honestly whether the numbers work — what we'd offer, what the monthly cost would be, and what you'd walk away with. There's no obligation to proceed.
Find out what your equipment is worth
Send us your equipment list and we'll come back with a fair buyback assessment within 48 hours. No obligation — just a clear number.